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Property Tax Cap Forcing Towns to Make Tough Decisions

3-28-13

By Senior Correspondent Desirée Taylor
NJ Today

Fiscal challenges have forced Linden’s mayor to make tough choices in order to live within the 2 percent state imposed property tax cap. Among them, possibly laying off dozens of firefighters and police officers.

“These are terrible choices, no one wants layoffs … but we have to have to get to the 2 percent cap, otherwise, we’re violating the law,” said Linden Mayor Richard Gerbounka.

The mayor is hoping to get concessions from the unions to get him out of this financial hole. If not, he says municipal employees will be furloughed once a week. But firefighter Cristopher Lukenda, president of Local 34, says eight firefighters were laid off just two years ago despite concessions. And he says there’s no more fat to cut.

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The New Jersey Civil Service Commission, which oversees hiring and layoffs for 194 municipalities, approved requests for 381 layoffs in 2012. So far in 2013, 19 requests have been approved.

Increasing costs, coupled with the stagnant economy and a drop in real estate values, have drained revenue sources for some municipalities. But Mount Arlington Mayor Art Ondish says towns can meet the 2 percent cap if they plan wisely.

“We’ve been fortunate, we’ve had a lot of growth and with those new additional tax revenue dollars, we reinvested in the town,” said Ondish.

The 2 percent cap does include exemptions in the case of an emergency, which may help some towns impacted by Superstorm Sandy. And municipalities can exceed the 2 percent cap if voters approve a referendum. But few towns have chosen that option.